The term "POS" is often used loosely to refer to either a simple payment terminal or a comprehensive point of sale system with multiple features. Modern POS systems go beyond transaction processing, combining inventory management, order management, reporting, and customer loyalty in one place. Choosing the right POS system can feel overwhelming with so many features, functionalities, configurations, and providers out there. In this post, we will dive into the types of POS systems available, what to look for in a POS system, and what a modern POS system should be able to handle.
What is a POS system?
At its core, a POS (Point of Sale) system acts as the powerhouse behind transactions, ensuring smooth sales and satisfied customers (given that everything works as it should). A POS system often refers to a combination of POS software and hardware that makes accepting and processing payments possible. Here's how it all comes together:
POS software: an engine for the sales operation
POS software is the engine that powers your transactions. Depending on your needs, there are several types of POS software:
Traditional POS: The classic point of sale solution used by store staff, offering quick access to core functions to serve customers in a great way.
Self-Service POS: Designed for direct customer use—think self-checkout kiosks in fast-food restaurants. These systems let shoppers handle their own orders and payments, helping reduce wait times.
Mobile POS (mPOS): This type of POS runs on smartphones or tablets, making it ideal for businesses on the go or for sales associates who assist customers throughout the store.
BYOD / Scan & Pay POS: Customers use mobile devices to scan items and complete in-store transactions. This frictionless approach speeds up checkout and enhances the shopping experience.
Multichannel POS: Combines online and offline sales, ensuring seamless inventory management, reporting, and customer experiences across all channels.
Deployment Options
A POS is most often deployed in one of two ways, depending on your preference for control, IT resources, and scalability:
On-Premise: You manage the hosting environment on your own servers or hardware. This offers complete control over security and customization but requires more IT involvement.
Cloud: The POS provider hosts and maintains the system for you, reducing your hardware burden and ensuring automatic software updates. This often delivers faster setup and easier scalability.
Mobile and cloud-based solutions have grown significantly in popularity among the various types of POS systems due to their convenience and flexibility.
POS hardware: the tools you need for the trade
You'll need the proper hardware to complement your software and make the magic happen.
Monitor or Tablet: The screen used to manage transactions.
Mobile Devices: Handy for mobile POS setups, ideal for taking payments anywhere.
Barcode Scanner: Speeds up checkouts by scanning product details instantly.
Card Reader: Accepts debit and credit card payments, often equipped with tap-to-pay functionality.
Receipt Printer: Prints out purchase details for customers who prefer paper receipts.
Your business's needs will vary depending on your industry, company size, and operational complexity. For example, an e-commerce-only business might not require any hardware, while a company with employees constantly on the move might prioritize mobile options for flexibility. The key is to select a setup that aligns with your operations and best serves your customers.
Start with business needs
As with any business decision, it all begins with identifying your specific needs and current challenges you'd like to solve. Not every business needs a POS system with fancy functions or the ability to handle complex SKUs. However, when evaluating different options, it's wise to think long-term and consider potential limitations that each system might have as your business grows and evolves. We've compiled a list of key points to consider when choosing a point-of-sale system for your business.
What to look for in a POS system?
Payment processing
Starting with the obvious, the core function of any POS system is handling transactions. But is it prepared to handle any kind of payment method customers might use? Your POS should be able to process various payment methods, including credit and debit cards, mobile wallets, cash, and buy-now-pay-later solutions. If you offer gift cards or have customers buying via invoice, your POS should handle those, too. Since payment methods evolve and new ones emerge yearly, select a provider you believe can keep up with future market demands.
Ease-of-use
We've all been there and felt the frustration of learning yet another new system. An intuitive and lightning-fast interface saves time, reduces training costs, and ensures a smoother customer checkout experience. This applies not only to your stationary or mobile POS operated by employees but also to any self-checkout stations your customers use. A great POS system becomes an extension of its user—so intuitive and rapid that employees can operate it with barely a glance, the same way a seasoned typist glides across a keyboard. This level of integration slashes wait times, reduces training needs, and reinforces your brand's customer satisfaction.
Flexibility
Many POS systems either cater to specific business types with a one-size-fits-all approach or lack essential features, forcing businesses to combine multiple software solutions. How about the best of both worlds? A system where you don't need to choose between convenience and customization. Some modern POS systems are flexible, allowing you to select the necessary features without paying for unnecessary functionalities. Don't settle for good enough. Aim for a platform that provides a solid, integrated foundation, allows customization to fit your unique processes, and ensures seamless communication between all parts.
Accurate inventory management
A payment goes through, and then what? A good POS system should be able to process transactions and update inventory simultaneously. Once payment is made, stock levels should be updated across all channels, warehouses, and stores in real-time. If the inventory management feature of a POS system fails, it can lead to stockouts, overstocking, and inefficient reordering, resulting in lost sales, increased costs, and operational disruptions. Customers may get frustrated by unavailable items, while inaccurate reports could lead to poor decisions.
Automation
It's not the 1980s anymore. If you're still performing repetitive, manual, and time-consuming tasks, it's way overdue to look for ways to automate them. Modern POS providers offer modules that complement the POS in various ways to automate operations, making your business more efficient and forward-thinking. They can send notifications or reorder products when stock is low, generate daily sales reports, and even use AI to predict trends, optimize inventory, and identify inefficiencies. This turns your POS into a strategic tool for better decision-making and more efficient store operations.
Reporting
For data-driven decision-making, you should first ensure the data you need is easily accessible. Name a better place to look for sales and order information than your POS. I'll wait. A modern POS with advanced reporting offers detailed sales and inventory reports and customer purchase history, and it preferably presents this information in an easy-to-understand format with charts and graphs. Accuracy and real-time updates should be given.
Built-in CRM and loyalty features
Your POS collects tons of customer data—what they buy, how often they shop, and even their favorite products. A POS with built-in loyalty CRM capabilities lets you harness this information to provide a better customer experience:
Easily enroll new customers into your membership program.
Quickly identify customers via their credit card and view their past purchases.
Build customer loyalty through personalized discounts or rewards.
Identify trends in purchasing behavior and serve to upsell or cross-sell opportunities.
Integration with third-party CRM software can help you engage with customers and transform one-time purchasers into loyal ones.
Security
Security is critical when handling customer information and payments. So here are the two acronyms you should keep in mind: PCI and P2PE. Your chosen POS system should always comply with Payment Card Industry (PCI) data security standards. Point-to-point encryption (P2PE) and data tokenization, on the other hand, ensure that sensitive transaction information is converted into an unreadable form or a non-sensitive token to protect it.
Reliability
A fast and reliable POS system is essential for minimizing stress and avoiding headaches. A modern POS system should handle hundreds of thousands of SKUs and over a million transactions a month effortlessly without sacrificing speed. It should be up and running even when your business goes offline, with an offline mode to ensure you never miss a sale again.
Scalability
Changing POS systems is a significant investment of time and money, and it's not something you want to do more often than necessary. When choosing a POS system, consider not just your current needs but where you want your business to be in 5 years. Can the system scale with you if you plan to grow and expand? Will it support growth into new markets, new ways of selling, or an increasing number of SKUs? Look for a flexible solution that can adapt to your evolving needs and the constantly changing market demands.
Integration possibilities
Chances are, you already rely on various software solutions and want your POS system to collaborate with them. Put simply, your chosen POS system should integrate seamlessly with your existing tools and have a modern API that is easily accessible on their website. Friction between software can lead to frustration and costly errors. Especially if you use less-known or custom software, make sure your POS provider can support integration. You shouldn't feel constrained by a limited selection of third-party integrations your POS provider offers.
Customer support
Even the most reliable POS systems can encounter issues, whether during the integration phase or after they're fully up and running. Choosing a provider that offers easily accessible support during your open hours can increase your operations' peace of mind, knowing that you can always reach out if there is an issue.
What’s next?
Choosing the right POS system is a big decision. Clearly defining your business's needs and priorities at the outset will make comparing different options and providers easier.
If you are looking for a place to start, we can help you with that. Heads POS system checks multiple points listed above and is already trusted by some of Scandinavia's largest retailers.
Curious to learn more? Reach out to us, and we'll get back to you with a detailed introduction of how Heads POS can be tailored for your business. Who knows? (We do!) You might not even need to look any further.
